Arbitral findings on limitation based on email acknowledgments constitute evidence appreciation immune from Section 34 interference.

Petitioner No. 1 is a technology platform company, and Petitioner No. 2 is its CEO. The Respondent is an investor who subscribed to 31,500 Compulsorily Convertible Debentures (CCDs) under a Debenture Subscription Agreement dated 16.07.2015

Per Clause 6.1, the CCDs were to convert into equity shares by 31.01.2017, or upon "Qualified Financing," whichever was earlier

No Qualified Financing occurred, and the CCDs were not converted by the deadline

The parties engaged in extensive email correspondence regarding the delay and potential settlement terms until 2023

The Arbitral Tribunal (AT) issued an award on 18.12.2024, holding the claims were within limitation due to acknowledgments of liability and directing the conversion of CCDs into 2% of the Petitioner’s paid-up capital as of 31.01.2017

The Petitioners challenged this award under Section 34 of the Arbitration and Conciliation Act, 1996

1. Whether the Respondent’s claims were barred by limitation, or if the correspondence between the parties constituted "acknowledgments of liability" under Section 18 of the Limitation Act, 1963.

2. Whether the Respondent waived his contractual rights or acquiesced to the non-conversion by engaging in negotiations for alternate settlement terms.

3. Whether the Arbitral Tribunal committed patent illegality by interpreting the contract to order conversion based on "paid-up capital" rather than "shareholding on a fully diluted basis."

Section 34 of the Arbitration and Conciliation Act, 1996, which limits judicial intervention to grounds of patent illegality or conflict with the public policy of India

The Court relied on the principles established in OPG Power Generation Private Limited v. Enexio Power Cooling Solutions India Private Limited, emphasizing that an arbitrator is the ultimate master of the quantity and quality of evidence

Regarding limitation, the court applied Section 18 of the Limitation Act, 1963, which stipulates that a written acknowledgment of liability signed by the party against whom a right is claimed starts a fresh period of limitation

The court referred to Gayatri Balasamy v. M/s ISG Novasoft Technologies Limited regarding the court's power to clarify or modify the terms of an award without altering its substance

The Court observed that the AT conducted a meticulous review of emails from 2016 to 2023, wherein the Petitioners repeatedly assured the Respondent that conversion would occur, thus constituting valid acknowledgments under Section 18 of the Limitation Act

The Court held that since limitation is a mixed question of fact and law, the AT's finding was a "plausible view" based on evidence and did not warrant interference under the restrictive scope of Section 34

On the issue of waiver, the Court agreed with the AT that negotiations were premised on the breach of the agreement and intended to resolve it, rather than abandon contractual rights, especially since no formal amendment was executed per Clause 15.6

Addressing the technical challenge to the term "paid-up capital," the Court found that the AT’s interpretation was reasonable in the context of the overall scheme of the Agreement

Since the Respondent consented to use the contractual term "shareholding" instead of "paid-up capital," the Court found this a permissible clarification that did not vitiate the award

It held that the claims were not barred by limitation and that there was no waiver of rights

The Court modified the direction in Paragraph 131(ii) of the Award to read "2% of the shareholding of Petitioner No. 1 as on 31.01.2017" instead of "paid-up capital" to align with the Agreement’s terminology

Consequently, the Enforcement Petition (OMP (ENF.) (COMM.) 101/2025) was directed to proceed in accordance with law